Sunday, October 16, 2011

Let's all hope the Brewers get to Game 7... (Baseball)

... and not because Game 7s are exciting or because it would mean that the Brewers would win Game 6 and therefore have a chance at making the World Series for only the second time in my lifetime; I don't much care about that as I probably wouldn't stay awake for Game 7 and I only care about baseball during the World Series anyway, as a general rule.

No, the reason I'm hoping the Brewers make it to Game 7 is because of what it means for the team financially. Understanding the economics of sports helps you understand why your team stays terrible year after year (because you keep going to the games, dummy) and why your team may be better off not winning the World Series (as I pointed out here, the Rays actually made less money the year they won the World Series), and now understands why teams want home-field advantage so badly, and why they may not care that much if they push the series out to Game 7.

Buried in a post over on The Sports Economist -- a post that talks about the economic impact of playoff games (and why that's largely a fake number) -- is this nugget of information:

In Major League Baseball, a portion of ticket revenues from the playoffs go into a pool from which playoff participants are paid. Focusing only on the NLCS, 60% of the revenues from the first 4 games are put into the players’ pool with 40% going to the team hosting each game. Should the series go past 4 games, 100% of the ticket revenues goes to the host team (the details are here in Article X of the current MLB CBA).
That doesn't get a lot of airplay, does it? As announcers talk about Miller Park being "the hardest place to play in baseball" (it was, this year), they don't mention that the homefield advantage the Brewers earned now means that if they can pull out a win today, they'll pocket a substantial amount of money. Miller Park's capacity is 41,900.

The actual breakdown of profits is this, according to the aforementioned Article X: A "Players Pool" of money is created by taking 60% of the tickets from the first four World Series games, first four League Championship Series games, and first three Divisional (Wild-Card) playoffs. That money is divided as follows:

World Series Winner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36%
World Series Loser. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24%
League Championship Series Losers (2). . . . . . . . . . . . . ....... . 24%
Division Series Losers (4). . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 12%
Non-Wild Card Second Place Teams (4). . . . . . . . . . . . . . . ...... 4%

See that? The team that almost made the wild card gets some money from the playoffs -- even though they didn't make it. So as I read it, Boston gets 4% of what ought to be a pretty big pool.

How big? It's guaranteed, by that CBA, to be $2.4 million or so to the World Series winner, and $1.6 million to the World Series loser; if the ticket sales fall below that, the number gets bumped up to a minimum amount, and that amount goes up if clubs raise ticket prices during the agreement.

It's not likely that guarantee will have to kick in; the last time the Winner's share was less than $10,000,000 was 1990, and it was still $9 million+ that year. Last year's winners the Giants got $21,266,321.79. (I like that they included the $0.79. That seems unnecessary, but you know somebody would have bitched about it if they didn't.)

So what happens to that money? The players on the teams divide it up:

The division of the Players’ pool shall be made by a vote of the Players, in a meeting chaired by the Player Representative, at which attendance shall be limited to Players, except that the field manager, prior to being excused from such meeting, shall be given first the opportunity to express his views as to the division of the pool. At the invitation of the Player Representative, the field manager may be present during the remainder of the meeting, or any part thereof.

The vote of the Players
shall not be subject to alteration, except as may be required to conform to the Major League Rules. Non-uniformed personnel of a Club shall not be eligible to receive a percentage share of the Players’ pool, but shall be eligible to receive cash awards of defined dollar value, provided that no cash award may
exceed the value of a full share.

So, interpreting for you, the players get all the money, unless they vote to give non-uniformed personnel some money, but no non-uniformed people can get more than the minimum amount given to a player.

The lowest paid person on the Milwaukee Brewers' roster this year is Jonathan Lucroy, who will make only$424,000.

How has the pool been divided up in the past? Evenly: Last year, the Giants (who according to this article got only $19 million, not the $21 million that other article cited) gave each player who got a full share $317,000 or so; the Rangers, for losing, all got $246,000. (Actually, the numbers are $317,631.29 and $246,279.55. Again, I like that they include the $0.29 and $0.55 on the checks.)

That's the player pool, remember: The Brewers give up only 60% of the gate for home games, so they've already gotten 40% of the divisional and championship series ticket sales (not to mention all the extra concessions and souvenirs) and they'll get 100% of that today.

To sum up:

-- The Brewers are going to make a bunch of money, win or lose today.

-- If they win today, they will make a bunch more money just by playing tomorrow.

-- If they can get to the World Series and push that to seven games, they'll make even more, as the National League has home field advantage this year.

-- None of that money will be used to re-sign Prince Fielder, which I think is just fine because I don't like him, because it's player money, not front office money.

Which raises this question: what are the Brewers going to do with the front office money that the Brewers will make in Game 6, and maybe Game 7? And in any games 6 and 7 in the World Series? Again,if history is any guide, not much: remember, the Rays made less of a profit the year they won because of higher operating costs. One reason that might be? In the regular season, all teams pay 31% of their revenues into a pool, and then get money back based on a formula. In the post-season, though, teams pay 60% of the ticket sales alone into a player pool, leaving them just 40% of the gate to cover all their operating costs, which remain the same (if not higher) during a postseason game. So while I began by pointing out that the Brewers will make a ton of money if they can survive through a Game 7 of the World Series, they'll also spend a ton of money to get there.

And some teams have generally been unwilling to spend that money -- which led to a minor scandal when teams like the Marlins let players walk away, refusing to put a decent product on the field but still receiving $31 million in revenues from the pool of money (the $31 million being double their payroll at the time. Nice work if you can get it, major league baseball team owner.)

This has been a pretty dry post; not everyone is as crazy about the economics of sports as I am, so let's finish up with Front Row Amy:

Who is another good reason to root for the Brewers to get as many home games as possible.


Rogue Mutt said...

Front Row Amy looks exactly like the "Fox Sports Detroit" girls. I think there's some evil Pod People thing going on to infiltrate baseball.

What sucks is if the Tigers had won one more regular season game they would have got home field in the series against Texas, though with all else being equal I suppose they made just as much money since it only went 6 games.

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